Case 03
VALIDATE IT.
He wanted to import a product.
The obvious question was:
How?
We started with a different one:
Should he?
An entrepreneur wanted to create a new business importing a specialized product from Vietnam into Canada.
He had never operated an import business before and believed the product represented a strong opportunity.
The obvious reaction would have been to begin teaching him how to import it.
We didn't.
Does the product have potential?
Before discussing logistics, suppliers or distribution, we examined whether the product had sufficient reason to exist in the target market.
The work included:
- Customer and market signals
- Existing alternatives
- Potential demand
- Relevant regulatory and import considerations
- Practical feasibility of moving the product into the market
Enough positive evidence existed to continue.
PROCEED.
Can there be a profitable business around it?
Next came the economics.
Using what I call the Napkin Principle, we examined the business at its simplest level:
- Product cost
- Logistics and landed costs
- Expected selling price
- Potential margins
- Setup and operating requirements
- Realistic sales potential
- Volume required to create a worthwhile business
The economics passed the second gate.
PROCEED.
Only then:
How do we build it?
Only then did we move into the how.
The Architecture
The architecture began connecting:
- Supplier
- Logistics
- Import requirements
- Distribution
- Go-to-market
- Required capabilities
- External expertise
- Commercial relationships
- Operational gaps
We identified what the entrepreneur could reasonably develop himself, what needed external support, and which relationships had to exist on both sides of the supply chain.
Status
The business is currently in development.
Required pieces are being put into place, gaps are being closed, external capabilities are being secured where necessary, and commercial relationships are being established.
This is not yet a completed commercial success.
Its proof lies in the progression from idea through evidence, economics and architecture into execution.
Outcome
VALIDATE / ARCHITECT / BUILD
The entrepreneur arrived with a product idea.
The idea survived validation.
The economics supported a business.
The architecture was developed.
Now the work is to make it exist.
Knowing how to execute an idea
is useless if the idea should never
have been executed in the first place.
First determine whether there is a business.
Then earn the right to build it.